For a bargain sale (below FMV), use the actual sales proceeds as the selling price. The gift of equity will affect the buyer's basis when they sell the home in the future.
Per IRS Pub 544 Bargain Sale:
"If you sell or exchange property for less than fair market value with the intent of making a gift, the transaction is partly a sale or exchange and partly a gift. You have a gain if the amount realized is more than your adjusted basis in the property. However, you do not have a loss if the amount realized is less than the adjusted basis of the property."
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